I cover real estate, writing about everything from trends in the housing market to ultra high-end luxury listings to data-based cities lists. Real estate is in my blood thanks to a realtor for a mom and a property developer/landlord for a dad. I have had a front row seat for the real estate market's inflation and subsequent crash over the past decade, watching my dad carry on with underwater mortgages and my mom struggle to put home sales together. I have been both a homeowner and a renter in the New York area and can't decide which I prefer.
I am also a regular guest on the 'Forbes on Fox' show on Fox News every Saturday morning and can sometimes be found discussing the major business headlines of the week on MSNBC's 'Weekends with Alex Witt.'
Before taking on the real estate beat, I worked as an Anchor/Reporter in Forbes Video. These days I shoot videos of crazy homes.
I graduated from New York University in 2009 with a BA in Anthropology and prior to that I worked in the other end of media as a recording artist with Sony.
If you have tips, story ideas or listings to submit for consideration, email me at mbrennan@forbes.com.

The Best Cities To Buy A Home Right Now

Buying a home is not a decision to be taken lightly. Personal finance gurus warn against purchasing unless you plan to keep it for a minimum of five years and, since the housing bubble burst, many say it’s best to buy only if it fits your lifestyle – not your investing portfolio.

For first-time home buyers shopping for a permanent, full-time residence, it’s advice to heed. But say you do simply want a place to park some of your hard-earned money, perhaps a fixer-upper you could occupy for a few years or maybe a house you believe you could rent out right away and easily oversee?

You wouldn’t be alone: investment-homes sales jumped 64.5% from 2010 to 2011, with investors making up 27% of all single-family, condo and co-op purchases last year, according to the National Association of Realtors. And it’s no wonder why. Home affordability is at the highest level ever in the 42 years that NAR has been tracking it. Nationally, home prices are down more than 30% from their 2006 peak. Mortgage rates hover near all-time lows, with 30-year fixed loans just under 4%. And while the 10-year Treasury note yields around 2% and a 1-year CD an even stingier 1% or less, housing investments, specifically homes purchased as rental properties, return a 6.3% yield on average, according to Goldman Sachs.

So you have cash or financing to make a purchase, you’re aware of the responsibilities that come with homeownership, and despite the woes continuing to hinder a full-on housing market recovery, you believe in brick and mortar investments. Now comes the tricky part: where to buy that house.

“A lot of what we read is national but you have to take housing down to the local level and look at the reasons why a market may be turning around, may be a good place to buy,” says Steve Berkowitz, chief executive of Realtor.com, a Campbell, Calif.-based home listing site.

To determine the best places to invest in a real estate purchase now, Realtor.com created a list which sorted through February housing and jobs data for 146 Metropolitan Areas and Metropolitan Divisions (cities and their neighboring suburbs) across the U.S. The company, which boasts millions of home listings filtered from over 900 Multiple Listing Services, looked at listing price data, sales data and inventory trends such as the amount of homes available in each market and number of days on market. Realtor.com also utilized the peak-to-trough home price index from Fiserv Case-Shiller, which tracks how much home prices have fallen in the past five years and can serve as an indicator of whether they have bottomed. Lastly, unemployment rates from the Bureau of Labor Statistics were factored into the rankings, since jobs (or lack thereof) are a leading indicator of housing demand.

If you want to buy low, foreclosure-riddled Tucson, Ariz., may be just the place. It ranks No. 1 on this list.

Home prices in the Old Pueblo are down more than 45% from their peak, according to the Fiserv Case-Shiller index and the February median list price for a home headed to market was $170,000, about 3% higher than it was this time last year, according to Realtor.com. The number of REOs (bank-owned homes) for sale is down 8% from February of 2011 and the number of foreclosures scheduled for sale has dropped 40%. Sales have also picked up, decreasing inventory levels. Single-family houses and condos are selling 12% faster than they were a year ago, averaging 86 days on the market (the national average is 111). The Tucson Association of Realtors reports that the total number of sales were up 16% in February from the same month a year ago.

“In the case of Tucson, you are looking at foreclosures dropping back quite a bit coupled with a stable employment market,” says Berkowitz. The area has a 7.8% unemployment rate, a tad lower than the national average of 8.2%, helped by the presence of sizable employers in the recession-resistant education and government sectors, including the University of Arizona, Davis-Monthan Air Force Base and the U.S. Army Intelligence Center. All of this suggests Tucson’s housing market may be bottoming.

In San Jose, Calif., you won’t find bargain-basement prices to rival Tucson’s, but it still takes seventh place on our list. The capital of Silicon Valley continues to reap the rewards of the tech boom. Thanks to startup entrepreneurs and job-seeking techies flocking there, housing inventory is 34% lower year-over-year and prices are pushing up. Listing and rental prices have appreciated 8% and 12% respectively, since this time last year.

“San Jose is interesting because you have the IPO market,” notes Berkowitz. Indeed, many local realtors are anticipating a deluge of Facebook IPO millionaires-turned-prospective buyers in the high-end real estate market in coming months.

Austin, Texas, another burgeoning tech town, landed number two on this list. The potential for home value appreciation in the “Silicon Hills” is one of the best in the country, according to Realtor.com. Homes in Austin are selling 20% faster than this time last year, averaging 77 days on the market. Inventory levels are 19% lower than last February and list prices have jumped up 12% in response.

Washington, D.C. has enjoyed a relatively robust housing market thanks to its insulated government-driven economy – but it doesn’t make this list. Nearby Baltimore (No. 4) is the city where a buyer looking to plunk money into an investment home should shop. “Baltimore would probably be a push-out from Washington. Washington has become so expensive that this is almost a move out from the city to the suburbs and beyond,” says Berkowitz.

Baltimore’s housing inventory is 26% lower than last year and those properties gracing the MLS are finding owners 4% faster. Prices, which had dropped 22% from their peak, continue to flat line and in some neighborhoods drop. But it hasn’t stopped sales. Pending home sales jumped 16% from February 2011 to February 2012 and existing-home sales rose 7%, according to the Metropolitan Regional Information Systems (MRIS).

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It is interesting that Tuscon made the list. I would suspect, while perhaps not as good of an investment as down south (Tuscon), the Phoenix area is improving in this regard. Prices are bound to be going up. According to an article I read recently released by the W. P. Carey School of Business, Phoenix is experiencing low inventory and home builders are struggling to secure the needed work force, capital, and land to fix the problem. The article suggests that lenders still view housing as going down and too risky to invest in. The individual land owner is holding on hoping that we are still at the bottom and prices will increase dramatically, and cheap labor is just no longer available. While these problems get worked out in the market, there may be an investment opportunity.

If you’re interested, you can find the article at: http://knowwpcarey.com/article.cfm?cid=25&aid=1160

Thanks for the comment Michael. While Phoenix didn’t make this specific list based on the specific methodology and set of data used, I would certainly concur. Positive housing indicators seem to be taking root there. Personally I also have my eye on Fla. metros like Miami. Miami has been on fire w. sales, inventory is down and new construction is starting up again. The biggest question mark in Fla. however will be how long it takes the for judicial foreclosures to clear out. Overall I think there are great investment opportunities to be had across the country, depending on neighborhood and the price you can get say, in a foreclosure auction

Thank you for replying to my comment. It’s nice to be able to have a dialogue with some of these topics. I would agree with you on Florida as well. I was also reading earlier today that Seattle is also experiencing low inventory right now as well. It appears to be a trend across the country. Hopefully, this means a full recovery to pre-speculator prices is on its way. One of MSN’s real estate blogs posted a story recently that showed results of a survey. The survey suggested that more and more consumer are considering buying a home right now. Surely the increased demand without much of an increase in supply will have a positive effect on the market. I just hope that problems for home builders, similar those in Phoenix, do not overpower the market into a longer-term supply shortage for long. It will also be interesting to see when banks start releasing some of their inventory – I would venture to say that the right time is approaching for a controlled release of some of those assets – but banks will have to be careful not to flood the market with supply and undo any good that has been done.

US has many problems now….Yes, but there are so many opportunities right now too….. Wait…? You shouldn’t wait, just move ahead. Try sth new.

My capital fund also didn’t want to wait for too long and we have made patnership with the leading company in Vietnam, Indonesia and Myanmar Market Development like Grand Waktu Co., Ltd ( www.grandwaktu.com ) and decided to invest in formation of some new investments.

There are a lot of kinds of invstments possible, but you just need to have a good contact, who will support you and give you “new signall” to invest…

I agree you should stay in control of your finances and always make a informed decision. But real estate is a local market. For your town and state, do the math on renting over buying, select a real estate agent that educates you about the market and analyzes your wants and needs and then choose a loan officer or mortgage specialist to establsih your buying power.

Morgan, I enjoyed your article “The Best Cities to Buy a Home Right Now. Realizing that homes for many people are not so much a matter of price but a calculation of the monthly cost, interest rates play a key role in determining who can buy and how much they will pay. My question is if interest rates were 5.5% at the peak of the market and they are now 4%, how has the reduction in rates, slowed the drop in prices? Or asked another way, if interest rates were still at the same rated as they were when home prices peaked, how much more would the prices of homes dropped? While my 5.5% suggested interest rate for a convenital loan at the peak may be incorrect, I hope you understand the question. My second question relates to the focus on the growth in rental rates and the building of new rental properties. Some of the news is reporting the absorption of the overhang of distressed single family homes, as they are foreclosed and sold or purchased by foreclosure buyers. My concern is if investors are now buying 27% of the foreclosed homes, are not the majority of these homes just temporary rentals and thus will return to the market when the market rebounds? In other words for the new home market to really rebound most of the investment homes will have be sold again and are really just silent inventory? Thanks

Hi Morgan, What do you think about phoenix, az? I am looking to buy a place to invest. I cant afford to buy my own house right now so I am looking for something affordable that I can invest. Thank you for your time.